A company comprised of competing divisions allows its top management frame policies or sound strategic thinking on various aspects like allocation of resources, funds, etc. In the light of the above statement, state the disadvantages of divisional structure.

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Solution

The disadvantages of divisional structure are as follows:

(i) There is duplication of physical facilities and functions.

(ii) Conflicts may arise between divisions on allocation of resources and funds.

(iii) Greater autonomy to divisional heads may lead to misuse of authority.

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A company comprised of competing divisions allows its top management frame policies or sound strategic thinking on various aspects like allocation of resources, funds, etc. In the light of the above statement, state the disadvantages of divisional structure.

The disadvantages of divisional structure are as follows: (i) There is duplication of physical facilities and functions. (ii) Conflicts may arise between divisions on allocation of resources and funds. (iii) Greater autonomy to divisional heads may lead to misuse of authority.

The disadvantages of divisional structure are as follows:

(i) There is duplication of physical facilities and functions.

(ii) Conflicts may arise between divisions on allocation of resources and funds.

(iii) Greater autonomy to divisional heads may lead to misuse of authority.